Grocery margins likely widened in April as consumer prices for beef, eggs and other staples increased at their fastest rate in decades and outpaced wholesale price changes because of impacts from the ongoing coronavirus pandemic.

The food at home index of the Consumer Price Index, or CPI, rose 4.1% during the month, its largest monthly advance since February 1974. The final-demand food category of the Producer Price Index, or PPI, meanwhile, rose just 0.3%. The Bureau of Labor Statistics, or BLS, gathered data by phone and online instead of through in-person visits due to work-from-home requirements prompted by the coronavirus pandemic. That difference meant that data for many consumer goods and services were based on fewer data points than in surveys conducted pre-pandemic, BLS said.

Grocery analysts use the difference between the food-focused CPI and PPI measures to determine the state of grocers' profit margins. For April, the difference was positive by 3.8 percentage points, a signal that grocers' margins likely improved during the month.

A reduction in sales and promotions helped drive grocers' profits higher during the month. The average basket value at Sprouts Farmers Market Inc. rose to $51 during the company's first quarter — roughly double its historical average, CFO and Treasurer Denise Paulonis told analysts during a May 5 call.

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At the same time, grocers are cutting back on or rethinking customer discounts. Sprouts' margins benefited from changes to its promotional strategy during the quarter that it began before the pandemic, Paulonis said. But The Kroger Co. Chairman and CEO Rodney McMullen said during an April 16 investor presentation that the company has changed its promotions as a result of the coronavirus, opting for discounts that encourage customers to buy single items instead of stocking up on a single one.

"There are some of our competitors that aren't running promotions," he added.

Protein prices also climbed during the month. Food-at-home prices for meats, poultry, fish and eggs rose the fastest during the month at 6.8%, with prices for fresh eggs, pork ribs and some cuts of beef increasing the most. U.S. meat-processing plants have started to reopen after outbreaks among workers prompted many, including several owned by Tyson Foods Inc., Smithfield Foods Inc. and JBS SA, to close temporarily.

The effects on food supply chains, including selection and prices at supermarkets, will depend on how close those plants get to normal production levels in the next 90 days, Tyson CEO Noel White said at an industry presentation May 13. If the disruptions continue, shortages of beef and pork at retailers could increase consumer demand — and thus prices — for chicken, he said.

"I think it's very feasible that prices could react to the most recent shortage in beef and pork," White said of chicken prices. "Right now, poultry is just an attractive alternative." The number of chickens hatched in the U.S. has declined in the last month, he added, which could "affect supplies in the mid-summer months."

Consumer prices for cereals and bakery products rose 3.1% in April, while dairy and related products advanced 5.2%, and nonalcoholic beverages and beverage materials increased 5%. Other food at home notched a 3.9% gain, while prices for fruits and vegetables rose 0.4%.

Food industry deals during the month included The Hershey Co.'s sale of jerky brand Krave back to private equity investor Sonoma Brands for an undisclosed amount. The deal, announced May 4, marks a reversal of Hershey's 2015 purchase of Krave from Sonoma.

The period also included Dairy Farmers of America Inc.'s acquisition of the Mayfield Dairy Farms Facility in Homewood, Ala., for $14.6 million. The deal is the latest in a string of facility acquisitions collectively worth $433 million by Dairy Farmers of America as part of an auction of Dean Foods Co.'s assets under bankruptcy proceedings.